- I removed the actual names for privacy reasons.
Fact: Heirs reside in different states, but not Alabama.
Preface: A cash deal was offered for the house that the spouse currently resides in, the mortgage was solely in my deceased father's name. My father did not have a will and when the house was in the process of being sold a title search revealed that my dad had children. So at this point the deal was stopped and we were notified. We are not sure what to do at this point, since this is the first time we heard that we were involved.
QUESTIONS FOR ATTORNEY:
- What are our options/rights as heirs?
- What happens if we decide not to sign and do nothing?
- Can the spouse partition for sale of the house? if so... how does this affect us legally/financially?
- Are we legally and/or financially responsible for anything that should happen going forward with the house?
- What options does the spouse have if we do not sign off on anything?
- If the spouse should go forward with any legal action against us... will this show up on a background check?
- What is the best way to handle this situation?
- Can I hire a lawyer to represent all 3 heirs if necessary?
I have attached the documents to explain better.
The contract is for $80,000 with buyer and seller to split closing costs (approximately $500 each). The deed shows ownership as tenants in common so when your dad passed, his 1/2 interest in the estate passes to his heirs. Under Alabama, law, the surviving spouse is entitled to a homestead allowance in the amount of $6,000.00 of value before any distribution of the estate to the heirs (Section 43-8-110). Based on the purchase price of $80,000 less the mortgage payoff of approximately $51,500, and closing costs of approximately $500, there is left $28,000.00. Remember, this is only 1/2 interest so the remaining equity for your dad's estate is $14,000. Under the homestead allowance, the spouse would receive $6,000.00 leaving $8,000 for the heirs. Spouse gets 1/2 ($4,000) and the 3 of you split the other half ($4,000 or $1,333 each)
Now, if the property could be sold for the tax appraised value of $112,600, the numbers would look as follows: $112,600 less $52,000 for mortgage payoff and closing costs leaving $60,600. Your dad only had a 1/2 interest so the 1/2 interest in the estate is $30,300.00. We then deduct spouse's homestead allowance of $6,000.00 leaving $24,300.00. Then, the surviving spouse receives 1/2 ($12,150) and the 3 of you get the other 1/2 ($12,150) to be split three ways ($4,050 each). In this scenario, the property would need to be on the market and probably listed with a real estate agent. The usual commission is 6% of the sale price so that makes the numbers change to $112,600 less $52,000 for mortgage payoff and closing and less $6,756 for real estate commission leaving $53,844. Half of that is $26,922 less $6,000 homestead allowance to spouse leaves $20,922. Spouse gets 1/2 which is $10,461 and the 3 of you split $10,461 ($3,487 each). In any scenario, we are not talking about a large amount of money.
No matter how the numbers come out, the 3 heirs get little or no money from the sale.
If the property is not sold, the mortgage payments must still be paid and whoever makes those payments is entitled to be reimbursed. If the mortgage payments are not made, then the mortgage company will foreclose and no one gets any money.
Thank you for your help, it is appreciated!
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